Data from the Egyptian Central Agency for Public Mobilization and Statistics in Egypt showed today, Tuesday, that consumer price inflation in Egyptian cities jumped to 13.1% on an annual basis last April, reaching its highest level in nearly 3 years.
The inflation reading, which is up from 10.5% in March, exceeded the average expectations of 17 analysts polled by Reuters, as it reached 11.8%.
Accelerating inflation increases pressure on the central bank to raise interest rates when it meets next week.
The inflation target for the bank is between 5% and 9%.
"Inflation has exceeded expectations due to the significant rise in food prices in light of the devaluation of the pound and the Ukraine war," said Mohamed Abu Basha of EFG Hermes.
Abu Basha added, "The Central Bank of Egypt will probably raise interest rates between 50 and 100 basis points in its next meeting, given the increase in inflation and the tendency of the Federal Reserve to tighten."
The US Federal Reserve raised the benchmark interest rate by half a percentage point on May 4, the largest jump in 22 years.
It should be noted that Egypt is the largest importer of wheat in the world, and it was severely affected by the rise in its global price due to the war in Ukraine.
It is also working to reduce the impact of the war on the tourism sector, given that Russian and Ukrainian tourists represented about a third of the total arrivals.